Divided Fed won’t deliver gold-boosting rate cut in 2026, EU EV sales support silver demand as ETFs slide – Heraeus

Heraeus reported that the Federal Reserve is unlikely to implement a rate cut in 2026, reflecting a divided stance among policymakers. This situation may maintain higher interest rates, which typically strengthens the U.S. dollar and pressures gold prices through the rate differential channel. In contrast, rising electric vehicle (EV) sales in the EU are expected to bolster silver demand, as silver is a key component in EV batteries. However, the decline in exchange-traded funds (ETFs) linked to precious metals indicates waning investor interest in gold and silver. Traders will be particularly attentive to upcoming U.S. inflation data, as it could influence Fed policy and subsequently impact gold and silver prices.

Gold (XAU/USD) is a safe-haven asset and inflation hedge. Major drivers include Fed policy (real yields), central bank buying (PBOC, RBI), ETF flows, and geopolitical risk. Gold often moves inversely to DXY and real US yields.

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